Proposed Provision: Eliminate the taxable maximum for years 2018 and later (phased in 2012-2017), and apply full 12.4 percent payroll tax rate to all earnings. Provide benefit credit for earnings above the current-law taxable maximum that were taxed after 2011, using a secondary PIA formula. This secondary PIA formula uses: (1) an “AIME+” derived from annual earnings from each year after 2011 that were in excess of that year’s current-law taxable maximum; (2) a bend point equal to 134 percent higher of the monthly current-law taxable maximum; and (3) formula factors of 3 percent and 0.25 percent, respectively.

OASDI Cost Rates and Income Rates
(as a percentage of taxable payroll)